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The 2024 Home Health Prospective Payment System Rate Update released by the Centers for Medicare & Medicaid Services Wednesday includes an overall payment increase of 0.8%.

The raise, equivalent to an estimated $140 million, reflects the effects of the home health payment update percentage of 3% ($525 million increase); an estimated 2.6% decrease, which reflects a permanent behavioral adjustment of $455 million; and another estimated 0.4% increase “that reflects the effects of an updated FDL ($70 million increase).”

Providers expressed outrage regarding the rule.

“We continue to strenuously disagree with CMS’s rate setting actions, including the budget neutrality methodology that CMS employed to arrive at the rate adjustments,” National Association for Home Care & Hospice President William Dombi said in a statement sent to McKnight’s Home Care Daily Pulse. “The fatally flawed payment methodology that CMS continues to insist on applying is having a direct and permanent effect on access to care. When you add in the impact of shortchanging home health agencies on an accurate cost inflation update of 5.2% over the last two years, the loss of care access is natural and foreseeable.”

While he conceded that CMS softened the proposed rule determination, it does not go far enough.

“We recognize that CMS has reduced the proposed 2024 rate cut,” he said. “However, overall spending on Medicare home health is down, 500,000 fewer patients are receiving care annually since 2018, patient referrals are being rejected more than 50% of the time because providers cannot afford to provide the care needed within the payment rates, and providers have closed their doors or restricted service territory to reduce care costs. If the payment rate was truly excessive, we would not see these actions occurring.”

As part of the rule, CMS enacted a permanent prospective adjustment of -2.890%. While the estimated 2.6% decrease related to the behavioral assumption adjustment includes all payments, the -2.890% behavioral assumption adjustment applies to the national, standardized 30-day period payments and does not affect payments for 30-day periods which are LUPAs, CMS explained.

The Partnership for Quality Home Healthcare said it is “extremely disappointed” that CMS opted for the -2.89% permanent behavioral adjustment.

“Despite compelling third-party data and concrete examples of reductions in patient access, CMS continued its policy of cuts, which have already had harmful impacts on the availability of care in the home for older Americans,” Joanne Cunningham, CEO of the Partnership, said in a statement. “This -2.89% cut for 2024 is on top of billions of dollars that have already been cut from Medicare home health.”

She added, “Both patients and providers have described how difficult it already is to access and deliver home health services because of years of continuous Medicare cuts, a significant staffing shortage, and rising inflation. I do not understand what the disconnect is.”

Katie Smith Sloan, president and CEO of LeadingAge, which represents nonprofit long-term care providers, said the “impact of the reductions will be profound.”

“Coming on the heels of last year’s 3.9% permanent rate reduction, the actions taken by the Centers for Medicare and Medicaid Services (CMS) today further threaten access at a time when demand for care at home is increasing,” she said.  

In response to comments made by home health stakeholders, CMS remained firm in its stance that payment rates will still be sufficient for home health agencies to provide adequate care.

“Overall, CMS’s data on the cost of providing care … indicate that the cost of providing home health care remains, on average, below the base payment rate and that HHAs in general continue to experience high profit margins,” CMS said in the final rule.

The proposed rule released in June called for a 2.2% reduction in Medicare reimbursement for home health agencies and a -5.653% permanent behavioral rate adjustment to account for the switch to the Patient-Driven Groupings Model. This is on top of a -3.925% permanent reduction that took place at the beginning of 2023.

Amid widespread backlash, NAHC sued CMS in July for its methods in calculating the behavioral rate adjustment. NAHC and other home health stakeholders argued that such deep cuts would only aggravate the industry’s staffing hardships, thereby reducing patients’ access to quality care.

Providers are calling on Congress to step in and take action.

“We now implore Congress to correct what CMS has done and prevent the impending harm to the millions of highly vulnerable home health patients that depend and will depend in the future on this essential Medicare benefit,” Dombi said in the statement Wednesday. “Fortunately, longstanding advocates for home health care, Senator Debbie Stabenow (D-MI) and Senator Susan Collins (R-ME) have introduced S. 2137 to eliminate the rate cuts. We urge the Congress to support this bill and enact it into law before the end of the year. The 2024 rate cuts must not take effect.”

The final rule is set to be published Nov. 13.

This is a developing story. Please check back for updates.